Sunday, May 2, 2010

Brave New World: Top NYT Executive Declares That NYT, Using Personal Data, Must Turn Its Readers Into "Leverageable Assets."

In a little-noticed speech on Friday, the NYT's Martin Nisenholtz, senior vice president for digital operations, laid out a bold and disturbing new plan for the company's future -- one that involves the NYT leveraging every bit of information about its readers it can get its hands on.

Nisenholtz's remarks -- delivered at the Wharton School of Business at the University of Pennsylvania, and transcribed by Paid Content -- made clear that as the NYT moves toward a paid website model, it also plans to use personal data about its readers to transform the user experience.

Nisenholtz declared that the future of the NYT lays in "the emotional connection that our users have with us" -- a relationship he described as "the essential moat around which our defenses are based."

In other words, it's the information that the NYT has about you, the users of its website -- gathered as part of a registration process it began when it launched nytimes.com in 1996, with more personal data to come when we all start paying -- that will enable the paper to transform a reader's use of the site into an interactive experience.

Armed with personal data about you, the website will one day perhaps answer your questions, offer you games, connect you to other readers, or send advertising your way -- just as Facebook has so successfully begun to do.

Nisenholtz revealed that Sheryl Sandberg, the number-two executive at Facebook -- and who he described as "the Queen of user engagement" -- visited the NYT heaquarters a few weeks ago for meetings to discuss Facebook's success in connecting with its 400 million worldwide users.

It's clear that Nisenholtz has become obsessed with Facebook's success at establishing the power of identity. To Nisenholtz, the Facebook phenomenon represents a fundamental shift from the anonymity that has dominated the Internet for much of its early history.

"Identity is, in my view, a fundamental building block for engagement," Nisenholtz said. "I think Facebook has now proven it to be true."

Nisenholtz's speech suggests a future in which the NYT readers become, more than ever before, a basic part of the paper's portfolio -- meaning the eventual impossibility of privacy for anyone who logs onto the NYT website.

Naturally, Nisenholtz paints a rosy picture of an "interactive" future modeled on Facebook -- but his words carry an ominous tone that suggests that NYT readers may one day be bombarded with advertising and emails aimed directly at them. That "interactive" aspect will be based on their usage of the site, with no mention of privacy protections.

"I’ve always thought that among our most leverageable assets is our audience," Niesenholtz said. "I’m referring to our audience as knowledgeable participants in the life of our web site. This creates the essential emotional bond that will lead to real engagement in an interactive setting.... We couldn’t scale it, but Facebook has."

Nisenholtz seems infatuated with all aspects of Facebook, which he described as "an exercise of one's ego online."

"As I’m sure you all know, the usage statistics on Facebook are off the charts," the NYT's digital chief nearly drooled to the Wharton audience, "in part, because of real identity, the exercise of oneself in the digital realm."

And in case there's any confusion, Nisenholtz doesn't just mean the value of Facebook knowing your name and email address. He means the fact that Facebook knows "a lot" about you -- where you live, who your friends are, where you went to school, where you work, and to which groups you belong.

"At the heart of this kind of knowledge sharing is identity," Nisenholtz explained. "I don’t just mean real names, although that helps. I mean a track record based on a lot of input." (Emphasis ours.)

Nisenholtz noted that the NYT's acquisition in 1999 of Abuzz -- a Massachusetts-based software maker that was supposed to help the paper connect information to readers -- didn't quite accomplish its mission.

The core message of Nisenholtz's remarks seemed to be that the financially-strapped NYT needs an interactive network with its readers to survive.

"A site like nytimes.com must fully transform from a broadcast news experience, to an interactive network," he declared. "It must transition from being on the web, to being of the web."

Of course, Nisenholtz couched his plans in the context of information sharing, and the idea that readers will benefit from sharing knowledge with the NYT that serves their interests.

But the senior NYT executive's fascination with "fun" social-media sites like FourSquare -- built around the idea of knowing exactly who its members are, where they are, and what they're consuming -- suggest a more troubling dimension to all this interactivity, and what it means for user privacy.

In other words, do you like the idea of the NYT knowing where you're having dinner?

That isn't Nisenholtz's plan, of course. He envisions a user-friendly relationship that services the NYT reader, by providing content in bold new ways.

But it's hard to misread these concluding words from Nisenholtz's speech on Friday:

"We have an opportunity to redefine the essential relationship that we have with our users—and change the contract we have with them—from one that is loose, free and casual, to one of real emotional commitment."

Is the NYT reader ready for an emotional commitment to the NYT? One that involves giving up the "loose, free and casual" nature of its relationship to date?

12 comments:

What I want from the NYT is quality journalism. What does the NYT want from me? Money? More than money - also my personal information? Will higher quality journalism lead me to want to give up more of my personal information? Will a lack of quality journalism squash my willingness to provide my personal information?

This sounds like the same song & dance we've heard over and over far and wide. OK, the infatuation with Facebook is a relatively recent phenomenon, but I think newspapers like the Times are overestimating the synergistic opportunities they have with Facebook. Facebook is all about entertainment and affiliation. The Times is neither a club nor an outlet for celebrity gossip.

And I don't think it will ever be impossible to browse the Times anonymously. Maybe the Times would like it that way, but there are always ways to go around or subvert those requirements.

Isn't the point that additional personal information would allow nytimes.com to target particular users for particular ads, and, because of this targeted advertising capability, charge higher rates for ad space?

If the only foreseeable risk in such a venture is that I see ads deemed specifically appropriate for me -- based on whatever metric or algorithm -- and the paper is able to charge higher rates to advertisers, I can't help but feel that is a win-win-win situation: in terms of my interaction with the site, nothing meaningful changes; advertisers get more effective advertising options; and the paper makes more money.

That was Nissenholz's business model at the start of nytimes.com more than a decade ago. The theory was that Toyota, for example, would direct Camry ads toward a different group from those singled out for, say, Lexis ads.

NYTPicker is a bit late to this issue and, even now, misses the more important issue. The most personal information, and that which is most susceptible to misuse, are the comments made by readers in response to various NYT's articles and blogs. Every opinion made by every reader is stored indefinitely by the Times and is easily retrievable and identifiable by the commenter's actual identity. It's a fact. The Times policy on the privacy of these opinions is not very clear. And, there is no guarantee that this policy, whatever it may be, will not be changed in the future. The potential for abuse here is very disturbing to me, particularly when I consider how very political the Times (and other major media outlets) have become. I don't care whether the Times knows where I have dinner. What is more important to me is whether the Times knows what I talk about at dinner.

For all the criticism of NYTPicker as an anonymous blog, one can really appreciate the ability to have one's words judged by what they are and not who has written them. And, most importantly, without fear of retribution.

Not all users are equal for to be tagged as a trendsetter is indeed the plague of the covetted. While most people don't care that their name and address is sold off to junkmail distributors, for the few who might, let there be a higher subscription rate to guard personal credit card information from being sold to third parties. Cardholders should reserve the right to sue credit card companies for trading consumption habits.

Hysterical. What a clusterfuck. Micro ads will not work. Why? It takes X time to make an ad for an audience. The ad for a Toyota Camry is not the same as one for a Toyota Prius. So you now end up having to come up with X sub 1, X sub 2, X sub 3, etc. ads.

So where are all the people going to come from to do all these ads? Not just graphics design, but the ideas themselves, the slogans, the writing of copy, the proofing, etc.?

And that's just Toyota. What about all the others? And some of the companies don't have microad potential. Do you think Tiffany's needs a whole bunch of ads? They know who their market is: rich people.

The Times will end up having to run those mortgage ads with the dancing silhouettes, the old man with his tongue sticking out, etc.

Oh, that's REALLY going to endear the Times to the readership. "Hey, Jane. Look at how common and lowbrow the Times looks!"

So the Internet's shift away from anonymity entails a shift away from privacy under the guise of "interactivity" (isn't the Internet already interactive?) in order to manipulate identity through self-regulation? Sign me up!

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